Economic insecurity and the distribution of income volatility in the United States

Faculty/Professorship: Methods of Empirical Social Research  
Author(s): Latner, Jonathan  
Title of the Journal: Social Science Research : a quarterly journal of social science methodology and quantitative research
ISSN: 0049-089X
Publisher Information: Amsterdam : Elsevier
Year of publication: 2019
Volume: 77
Pages: 193-213
Language(s): English
DOI: 10.1016/j.ssresearch.2018.09.005
We examine inequalities in the distribution of income volatility in two ways using data from the Panel Study of Income Dynamics (PSID) in order to improve our understanding of economic insecurity. First, we use a variance function regression to jointly quantify the relationship between changes in average levels of volatility as they relate to changes in the distribution of volatility. The results indicate that inequalities in the distribution of volatility rise much faster than the overall level of volatility. Therefore, what are often perceived to be rising levels of volatility for everyone are better understood as rising levels of volatility for households at the top of the volatility distribution. Second, we use a linear probability model to better understand changes in who experiences high income volatility over time. Rising inequalities in the distribution of volatility turn out to be the result of a rising probability of experiencing high volatility among households that would not typically be classified as economically insecure.
GND Keywords: USA; Einkommensverteilung; Volatilität
Keywords: Income volatility, Income mobility, Inequality, Economic insecurity, Standard of living
DDC Classification: 300 Social sciences, sociology & anthropology  
330 Economics  
RVK Classification: MS 1235   
International Distribution: Ja
Type: Article
Year of publication: 11. December 2018